Pebble's EPA fight moves through court

The first court decision could come as early as October in a lawsuit challenging the U.S. Environmental Protection Agency’s attempt to use Clean Water Act authority to preempt mining at the Pebble project southwest of Anchorage, according to the president of the company planning the mine.

Pebble Limited Partnership has mounted an aggressive legal offensive against the EPA’s pending action to use a section of the Clean Water Act against the company’s proposed copper and gold mine near Iliamna.

“We’re going to be very aggressive. If we are not successful with Plan A (the lawsuit) we have a Plan B, C and D. We’re not going to give up,” Pebble CEO Tom Collier told the Resource Development Council in a briefing.

The suit challenging the EPA’s assertion of its authority, under Section 404(c) of the Clean Water Act, is now in Judge Russel Holland’s U.S. District Court in Anchorage. The state and several Alaska business organizations have intervened in the case.

Holland’s first decision in the case, on Pebble Partnership’s motion to enjoin the EPA action, could come in October, Collier told the RDC. Briefings on the motion are to be completed in September.

If the Pebble Mine is built, it would create thousands of jobs and provide an economic base for an economically-depressed region that would last for decades, according to Collier’s presentation.

Estimates are the project would also generate $165 million to $213 million in annual tax and royalty revenue to the state as well as taxes to the Lake and Peninsula Borough, the regional municipality.

The State of Alaska has intervened in the case in support of Pebble Partnership because the mine would be on state-owned lands. Those lands are classified for mineral development in the state’s regional land management plan.

An EPA veto of a mine on state lands would have the effect of a federal condemnation of state lands and resources, state officials have said.

On the other side of this, sport and commercial fisheries groups and tribal organizations in the Bristol Bay area, which is west of the proposed mine, are worried about contamination of salmon streams and have sought EPA’s protection.

Although much of the commercial and sport fishing industry is nonresident, Alaska Native villagers downstream from the mine worry about effects on the sustainability of salmon fisheries that are important for subsistence.

The Clean Water Act gives the U.S. Army Corps the Engineers the authority to receive and review permits for major projects and lays out procedures for the corps to follow, in sections 404(a) and 404(b). However, Section 404(c) allows the EPA authority to intervene and void a Corps permit in certain cases where there are severe environmental effects.

That authority has been used only rarely and always in cases where a permit has been issued [applied for]. Its use in a case prior to a permit being issued, and even an application being filed, is unprecedented. Because section 404(c) has never been used in that way, there are also no regulations to guide the EPA in its action. Legally, it is uncharted territory.

If Judge Holland enjoins the EPA “we’re back in business,” proceeding toward an application for permits, Collier told the RDC. If Holland upholds EPA, however, “we’ll proceed to Plan B,” he said.

The EPA plan with Pebble may be part of a bigger strategy being pursued by national environmental groups, Collier said.

The traditional route, spelled out in the Clean Water Act, is for the Corps of Engineers to review project applications and to supervise the required National Environmental Policy Act review. EPA’s role is secondary, in support of the Corps.

The effect of the agency’s current initiative, if it succeeds, would be to marginalize the Corps’ role and make EPA the lead federal agency in areas where the agency asserts its 404(c) authority, and there are no guidelines as to how that would happen.

It would also preempt the NEPA process, which is the government’s established method of weighing risks and alternatives in a major federal decision.

The “Bristol Bay Watershed Assessment” done by EPA as a justification for the 404(c) action on Pebble is not prescribed in federal regulations and, legally, amounts to a kind of informational reference document for the agency.

The document has been criticized by Pebble Partnership and the state because it includes only hypothetical mine scenarios, not an actual proposal that would be weighed in an EIS, and also includes no discussion of possible mitigation of impacts. The document has also been criticized by some scientists on a review panel convened by EPA, and it is not a substitute for the more rigorous NEPA procedure.

Collier also told the RDC the 404(c) effort against Pebble appears to also be part of an effort by environmental groups for EPA to assert authority in entire watersheds, not just an area affected by a project.

“Pebble is being used as camouflage. The goal is to divert any discussion of this authority to basically zone America and to instead make it about Pebble,” Collier said.

He related a conversation he had with an old friend who was in the leadership of a national environmental organization.

“My friend said, ‘Tom, you’ve got to understand that this is part of a strategy to get away from case-by-case decisions (on projects) and to make the decision based on the watershed. That’s why we’re doing this,” Collier said he was told.

Tribal groups in Wisconsin and Michigan have asked EPA to initiate similar watershed-based assessments in their regions to stop mining projects, Collier said.

Pebble now has evidence that the 404(c) initiative has been in the works for a long time. Documents the company has been able to obtain so far through the Freedom of Information Act that conversations on use of 404(c) began between environmental groups and EPA staff in 2008.

Senior EPA officials briefed former EPA Administrator Lisa Jackson in mid-2010 on a 404(c) assertion at Pebble as a test case, an indication that preparations had been underway within the agency prior petitions being filed by tribes in the region asking for 404(c) protection.

A request for a budget allocation to support the preparations for 404(c) assertion was also made within EPA at about the same time.

Jackson and top EPA officials visited Alaska in mid-2010 and spent 90 minutes with Pebble’s management on the project but did not mention that the tribes has requested intervention, Pebble spokesman Mike Heatwole said. The company learned of it only later.

Collier said evidence of the pre-2010 collusion between environmental groups and the agency is based on the limited number of documents that have been obtained under the Freedom of Information Act, or FOIA. A trove of material is being withheld, however, as much as 30,000 pages of documents.

The company has filed appeal of the agency’s withholding of documents but Heatwole said the lawsuit in Holland’s U.S. District Court would result in the materials being obtained under discovery if the agency doesn’t provide them under the FOIA.

The arbitrary nature of the action is a major concern to businesses and several industries
in Alaska.

“The action targets 1,100 acres of wetlands. Why not 1,200 acres, or 2,000 acres? Will these new limits (imposed at the Pebble site) become default standard across the watershed, or Alaska?” asked Rick Rogers, the Resource Development Council’s executive director.

In contrast, “There is no environmental risk in allowing due process and a hard look (at the proposal) that is required under NEPA,” Rogers said.

A more fundamental concern is what this does to the Section 404 process itself. In a brief in the lawsuit filed by a coalition of Alaska resource industries and business groups, including the RDC, raises concerns about the continued reliability of the permit-review process under the Clean Water Act.

“The broader resource community is very concerned with the precedent. Will NEPA be circumvented for other projects or industries?” Rogers said.

In the petition to intervene the groups said, “The regulated industries (of Alaska) and small businesses depend on certainty in the Section 404 process with clear regulatory standards and procedures.” 

“EPA should be an unbiased and fair regulator,” Rogers said. “The damage this process has done to the EPA’s credibility as a fair and objective regulator will be very difficult for the agency to repair.”